Seconds Opens Up SMS-Based Payments System to Let Anyone Text to Buy

Today Seattle-based Seconds opened up its simple online and mobile payment platform publicly to help anyone make or accept a payment online or via SMS. The company, which was founded in fall 2011 and launched with select merchants in January 2012, allows individuals, companies, and non-profit organizations to accept payments via SMS, and lets consumers pay for items by texting a keyword, no smartphone necessary.

Along the lines of one-click selling startups like Gumroad and ShopLocket, Seconds aims to reduce the barriers for people looking to buy and sell items. Founder Nick Hughes said in an interview that he started Seconds to test the possibilities of SMS-based payments, and to make it so that users don’t have to download an app and merchants don’t have to install new hardware in order to get on the mobile payments bandwagon.

“We really see an opportunity to target consumers in that direction, and make it seamless and easy, rather than an app that you have to download,” he said. “Our vision is that anyone should be able to make a mobile payment with any device, and hopefully to any merchant in the world.”

To accept payments via Seconds, users sign up for a merchant account online by entering a few extra pieces of information like their location and business name (if they have one). Seconds is integrated with Stripe for credit card payments and Dwolla for bank-funded payments, so merchants have to either create an account with those services or connect to an existing account, and are then assigned a phone number so they can accept text-based payments if they choose to.

Merchants can accept payments on the web or mobile web, or via SMS by assigning a keyword to a dollar amount, for example letting consumers know they can text ‘donate’ to donate $5 to a cause. Consumers who want to buy online would search for that merchant (by Twitter handle, location, name, etc.) on the Seconds website, where they could then enter their payment details and crate an account. Or they could send an SMS to buy by texting the merchant’s phone number with the keyword, which would send back a link where users can fill in their credit card credentials. Customers don’t have to have a Seconds account to make a payment (though they can create one so it’s easier the second time).

Hughes said they’re currently working on confirmation notifications, for example giving consumers the ability to confirm a purchase before it’s processed, or letting them ask a question about a transaction, but at launch won’t be available.

In March Hughes told BetaKit that the service was in use by a lot of restaurants, who were using it to accept takeout orders. He said they’ve now shifted away from product-based retailers, and are now targeting non-profit organizations, fraternities and sororities, schools, and anyone else who wants to accept a payment for a service (Hughes gave the example of landlords accepting rent payments). “One of the other things we learned initially…is that our technology, our payment system, is actually not optimal for physical retail,” he said. “We believe that there is tremendous amount of opportunity in the areas of your life that are outside physical retail.”

Anyone accepting payments via Seconds will have to pay Stripe’s 2.7 percent + $0.30 per transaction fee,  or Dwolla’s maximum fee of $0.25 per transaction, depending how a payment is processed. Seconds charges $0.50 per transaction on top of those processing fees, plus $5 per month for anyone accepting payments via SMS. Hughes admits it’s higher than no-fee transaction solutions like LevelUp, but says that “quality, speed and convenience are worth paying possibly a premium.”

Hughes said Seconds is really meant to replace any transaction that people would typically write a cheque or pay cash for, but Seconds is by no means the only option for people looking to get paid on the go. There’s bank transfers for friends sending money to friends or landlords, and PayPal for online payments and donations, though Hughes believes PayPal “leaves a lot to be desired” for both merchants and consumers. And there are already services like ZayPay and txtNation that support SMS-based billing, but they’re targeted at businesses and developers, rather than the average person who wants to get paid.

Seconds’ real market opportunity is targeting users with feature phones who want to make mobile payments. After all smartphone penetration just recently hit 50 percent in the U.S. and 38 percent globally, which means there’s still a huge market of people, both in the U.S. and in developing areas, who don’t have access to native apps.

 

Erin Bury

Erin Bury

Erin has covered startups and technology for over three years in publications including Sprouter Weekly, The Globe and Mail, Business Insider, Mashable, and VentureBeat. She also writes a regular startup column for the Financial Post, and is a technology expert on CTV News Channel. Before BetaKit Erin worked as Director of Content & Communications at Sprouter from its launch in 2009 until its acquisition by Postmedia Network Inc. She was recently named one of Marketing Magazine's 30 Under 30 in 2012.

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